Estate agents are pressuring first time buyers into purchasing financial products when buying their home, according to new research.
The findings from clients of the accountancy group, Hacker Young, indicate younger people with less experience of the industry are more likely to purchase financial products from an estate agent. This can result in them being offered less choice and paying over the odds.
Hacker Young’s spokesperson, Angela Johnston, said: ‘It is unfortunate first time buyers feel they have no other options apart from the ones an estate agent recommends. Too many people jump into signing anything when they are determined to buy the home of their dreams. Estate agents take advantage of this.’
Ray Boulger, senior technical manager at Charcol, agreed first time buyers might be vulnerable in the mortgage market.
He said: ‘First time buyers may not understand the opportunities available to them. Many estate agents have a panel of lenders they recommend. But some tend to recommend the lender that owns them.’
However, Graham Harris, former president of the National Association of Estate Agents, said the association does not like or encourage such practice.
He said: ‘Pressuring the innocent is the worst type of sale and we do not encourage it. This practice should be outlawed and first time buyers should be protected as much as possible.’
Johnston believes some estate agents only sell products because they generate a substantial commission for the agent.
She said: ‘Estate agents are not independent financial advi-sers. The reality is, buyers do not have to buy any of these items from their estate agent. Better deals can often be found by shopping around. Buyers should look around for the best deal that suits their circumstances.’
Boulger agreed: ‘If people deal with an IFA or an independent estate agent they will get better advice in most instances. If estate agents operate from a panel of lenders they need at least 20 to give good advice. If an estate agent is trying to push a particular product, it is easy to make it sound good.’